Disclosures

Computer Task Group, Incorporated

We, Zach Cummins and Kevin Liu , certify that this report reflects our personal beliefs about this company and that no portion of our compensation was, is or will be directly or indirectly related to the specific recommendations or views discussed in this report.

Disclosure

  • B. Riley & Co., LLC, or any of its affiliates, does and seeks to do business with companies covered in its research reports.
  • A portion of this analyst’s compensation is based on the sales, trading and investment banking activities of B. Riley & Co., LLC.
  • B. Riley & Co., LLC makes a market in the securities of the company covered in this report.
  • B. Riley & Co., LLC, or any of its affiliates, has received compensation from this company in the past 12 months.
  • This company currently is, or within the past 12 months was, a client of B. Riley & Co., LLC. or any of its affiliates. The services provided were Non-Investment Banking Securities-Related Services.
  • This report may be distributed by FBR Capital Markets & Co., an affiliate of B. Riley & Co., LLC and as such constitutes third party research. For additional information, please visit http://www.fbr.com/disclosures.
Disclosure Chart

Initiated Coverage on 01/04/2013 with a "Neutral" Rating and Price Target of $20.75

Ratings Distribution as of August 21, 2017
Rating Number of Companies Percent of Total
Buy 145 74.4%
Neutral 49 25.1%
Sell 1 0.5%
Total 195 100%
% with Investment Banking Relationships
Rating Number of Companies Percent of Total
Buy 23 88.5%
Neutral 3 11.5%
Sell 0 0.0%
Total 26 100%

Explanation of B. Riley & Co. LLC's Rating System

  • Buy: We generally expect “Buy” rated stocks to have an above-average risk-adjusted total return over the next 12 months. We recommend that investors buy the securities at the current valuation.
  • Neutral: We generally believe “Neutral” rated stocks will have an average risk-adjusted total return over the next 12 months.
  • Sell: We generally expect “Sell” rated stocks to have a below-average risk-adjusted total return over the next 12 months. We recommend that investors reduce their positions until the valuation or fundamentals become more compelling.

Risks and Considerations

  • Competition - The industry is highly competitive and many of the Company's competitors have greater resources.
  • Cyclical Nature of the Company's Business - Revenue from the Company's businesses have historically correlated positively with both US and world GDP. A cyclical downturn in GDP growth domestically and/or abroad may lead to a material deterioration in the Company's results.
  • Recruitment and Retention - The Company depends on its consultants to generate business. Should the Company experience difficulties in recruiting new talent or retaining current employees, the Company's operating results may suffer.
  • General Industry - The Company could miss our estimates and/or their financial guidance.
  • Further Potential Risks - See the Company's SEC filings, particularly its 10-K filing, for a discussion of further potential risks.

Additional Risks and Considerations

    • Acquisitions. Although the company has not undertaken strategic transactions of late, CTG may pursue acquisitions in the future that could be dilutive to financial results and may result in difficult or expensive integration efforts.   

    • Competition. The market for IT consulting and staffing services is highly competitive and has low barriers to entry.  Competition could negatively impact the company’s bill rates and ability to attract talent.

    • Customer Concentration. IBM is the company’s largest customer, accounting for over 20% of revenues.  No other customer accounts for greater than 10% of sales.

    • Economic Conditions. Demand for IT services and solutions may decline in periods of economic uncertainty or recession.  The majority of the company’s contracts are short-term in nature or terminable with limited notice.

    • See CTG’s SEC filings for additional risks.